GST Connect

Introduction: This article has been prepared considering the various changes and clarification through the Acts, Rules, Circulars, formats under GST with respect to job work. The importance of a job worker to the principal is significant to the products cost, quality, lead time and therefore, becomes an integral cog in the OEM process. The major […]

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Analysis of ITC of / In Respect of Motor Vehicles CGST (Amendment) Act, 2018 as well as  CGST Act, 2017  have been amended respectively for the first time since the implementation of GST in our Country. Section 17(5) gives us the cases of blocked credit – any goods or services which are getting covered under the […]

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New GST rate for under-construction properties has been slashed by almost 7% and this will be implemented from April 01, 2019.  
A ray of hope has come for prospective homebuyers. They were struggling to buy due to high prices and complicated tax structure in the past. In its 33rd meeting, the GST Council slashed GST rates levied on under-construction residential properties. Talking about the move, BK Goenka, President of Assocham said, “The move had been much anticipated for a while and the industry, as well as the homebuyers would certainly be glad that the move has come at the right time.”New GST rate for under-construction properties has been slashed by almost 7% and this will be implemented from April 01, 2019. The new tax structure now is 5% GST on residential properties outside the affordable housing segment from previous 12%. Further, GST on affordable housing has been cut to 1% from previous 8%. Both the rates will be charged without an Input Tax Credit (ITC). Residential prop…

While the initiatives taken by the government on the policy front have supported the growth of the industry, there is a need for a parallel focus on resolving some of the issues impacting the sector.The Information Technology (IT) sector plays a vital role in the growth of the Indian economy. India is one of the leading sourcing destinations in the world for technology and business process services, accounting for approximately 55 per cent market share of the global services sourcing business in 2017-18. Indian IT’s core competencies and strengths have attracted significant investments from major countries. In the recent years, Indian technology vendors have also evolved their core solution offerings from traditional application and infrastructure management services to emerging technologies such as blockchain, artificial intelligence, automation, etc. and have invested in innovation hubs and research & development centres to create differentiated offerings. The government has ide…

In re Piyush Polytex Industries Pvt. Ltd (GST AAR West Bangal) Seeks a Ruling on description & HSN of Bags/Sacks (both with & without Handle) made of (i) Laminated P.P. Nonwoven Fabric, (ii) B.O.P.P. Pasted P.P. Nonwoven Fabric and (iii) Woven Fabric Pasted with Nonwoven Fabric, under the GST Act. (i) Bags/Sacks (both with & […]

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In re Sarj Educational Centre (GST AAR West Bangal) Whether service to the students for lodging along with food is a composite supply within the meaning of section 2(30) of the GST Applicant is offering several individual services in two different combinations to the recipients, depending upon their need for lodging facility. Each of the […]

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In re Nipha Exports Pvt Ltd (GST AAR West Bangal) Whether ITC is admissible on ambulances purchased for the benefit of the employees under legal requirement of the Factories Act, 1948. It is evident from above that input tax credit on inward supply of ambulance, being a motor vehicle, is not admissible under Section 1 […]

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NEW DELHI: Credit rating agency Moody’s Wednesday said the GST rate cut on under-construction flats will boost housing sales, but may hit profit margins of builders with withdrawal of input tax credit.The GST Council had on Sunday decided to cut goods and services tax (GST) rate on affordable homes to 1 per cent without input tax credit (ITC) from earlier 8 per cent with ITC.The GST on under-construction flats, which is not under the affordable housing segment, has been reduced to 5 per cent without ITC from earlier 12 per cent with ITC.“The reduction in GST is credit positive for India’s property developers, because the reduction in tax will boost demand and increase sales of properties under construction,” Moody’s Investors Service said in a statement.“India’s real estate sector has weathered difficulties in the last few years amid price reductions from a glut of inventory and lackluster demand. The reduction in GST will improve housing affordability as the amount to be paid by a po…

Transparency and simplicity in the tax regime are casualties of the GST Council’s recent decisionsIt has the best intentions, but the Goods and Services Tax (GST) Council is nevertheless systematically eroding the strongest features of the new tax regime — simplicity and transparency.From three to eight ratesBefore the GST was introduced, the government set up a panel under the then Chief Economic Adviser, Arvind Subramanian, to come up with a suitable rate at which most items should be taxed under the GST. Mr. Subramanian came up with a standard rate of 15% for most items, a “low rate” for essentials, and a “high rate” for demerit goods. Presumably dissatisfied with just three rates, the government chose to introduce GST with five different tax slabs: 0%, 5%, 12%, 18% and 28%. Still not satisfied, the GST Council then introduced two more highly specific rates: a nominal 0.25% for rough diamonds and 3% for gold. Those of a critical bent of mind immediately pointed out that the major b…

CM says the Budget reiterates government’s commitment to accord highest priority to welfare schemes for uplifting farmers, generating employmentThe Devendra Fadnavis government on Wednesday presented a revenue deficit Interim Budget of Rs 19,784 crore before the state Assembly, while allotting Rs 9,566 crore for the irrigation sector, with a focus on Vidarbha and Marathwada and the drought-hit regions.As against the revenue receipts of Rs 3,14,489 crore, revenue expenditure has been estimated at Rs 3,34,273 crore, resulting in the deficit of Rs 19,784 crore.The financial constraints of providing Rs 24,000 crore for implementing Seventh Pay Commission recommendations, coupled with allocations for drought mitigation, were cited as the primary reasons for the deficit. Officials said the state’s growing expenditure will have to be relooked and drastic measures taken to explore new avenues of revenue mobilisation.What has compounded the fiscal challenge is the government’s decision to emph…

From 5G auction to Jet Airways, Business Standard brings you top 10 business and economic stories that made news on WednesdayFinance Ministry asks direct tax code panel to revise existing I-T slabsThe finance ministry has asked the direct tax code (DTC) panel to revise the existing income-tax (I-T) slabs, especially in the 20 per cent bracket, said a senior government official privy to the development. The panel has sought three months to incorporate the suggestions.This suggestion was given when the task force for re-writing direct tax legislation met Finance Minister Arun Jaitley on Wednesday, a day ahead of the scheduled submission of the DTC draft report.SBI has found fraud worth Rs 7,951.3cr in April-December: RTI replyThe State Bank Group has said as much as Rs 7,951.29 crore involving 1,885 cases of fraudulent activities have come to light during the first nine months of the current fiscal year.In an RTI reply, the nation’s largest lender said, the first quarter reported 669 ca…

Central Board of Indirect Taxes and Customs Member (Investigation) John Joseph further said the department would soon call a meeting of the representatives of the real estate sector to understand transition issues faced by the sector post reduction in GST rates.The government has detected Rs 20,000 crore worth GST evasion so far this fiscal and will take more steps to check frauds and increase compliance, a senior tax officer said on Wednesday.Central Board of Indirect Taxes and Customs Member (Investigation) John Joseph further said the department would soon call a meeting of the representatives of the real estate sector to understand transition issues faced by the sector post reduction in GST rates.The GST Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, earlier this week decided to cut tax rates on under-construction apartments and affordable housing to five per cent and one per cent, respectively.However, builders will not be able to claim credi…

Over the past month, the NAA has issued notices to about 10 of Patanjali’s biggest distributors for not reducing prices in line with the cut in GSTPatanjali Ayurved distributors have come under the lens of National Anti-profiteering Authority (NAA) for not passing on lower GST rate benefits to customers, according to a report by The Economic Times.Over the past month, the NAA has issued notices to about 10 of Patanjali’s biggest distributors for not reducing prices in line with the cuts in Goods and Services Tax (GST), sources told the newspaper. The notices seek details of prices charged on products, particularly cosmetics.Since the introduction of GST on July 1, 2017, the government has lowered rates on various goods.In October 2018, the anti-profiteering authority had asked Baba Ramdev-led Patanjali to pay Rs 150 crore penalty for not passing on the lowered GST rates to its customers over the last one year. While investigations in this matter are ongoing, media report suggests that…

It’s now slightly more than one and half years that GST has been implemented, and hence a good time to take stock of its ‘hits and misses’.There were certain basic objectives of introduction of GST. One was to substantially reduce, if not eliminate, the cascading of taxes by providing seamless flow of input tax credit in the entire supply chain. The second aim was to cut down the compliance costs by clubbing together seventeen indirect taxes of Center and States like Central Excise, Service Tax, and State VAT etc. These two targets have been achieved substantially, except that five Petroleum products and Alcohol for human consumption could not be brought within GST. The third aim was to reduce the logistics and transportation costs.In the pre-GST era, worst thing was the Central Sales Tax (CST) for inter-state trade because CST could not be taken as credit and hence was a cost that was added to the value of goods. Therefore, often there was a business compulsion for tax-avoidance or t…

The Goods And Services Act, 2017 is historical change in taxation system in India which has came in to force from 1st July, 2017.  But it requires transformation since its impact on all segments like manufacturers, traders, consumers, supply chain, works contracts, information technology system, logistics, service oriented business etc., etc.

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After the inconclusive meeting through a Video Conferencing, the Arun Jaitely led GST Council concluded with few take-away for the end consumer. Let us analyse the decisions: GST rate: GST shall be levied at effective GST rate of 5% without ITC on residential properties outside affordable segment; GST shall be levied at effective GST of […]

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Ref:- The Central Goods and Services Tax Act, 2017 The Integrated Goods and Services Tax, 2017 The Goods and Services Tax (Compensation to States) Act, 2017 The Maharashtra Goods and Services Tax Act, 2017 Introduction to Advance Ruling and Appeal Mechanism in GST Law for Maharashtra: An Advance Ruling helps the applicant in planning his […]

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The decision by the GST Council to cut tax rate on under-construction residential properties from 12% to 5% and on affordable housing from 8% to 1% is expected to boost real estate demand and also encourage sale of such properties, said real estate stakeholders in Gurugram.
The decision by the Goods and Services Tax (GST) Council on Sunday, February 24, to cut the tax rate on under-construction residential properties from 12% to 5% and that on affordable housing from 8% to 1% is expected to boost real estate demand and also encourage the sale of such properties, said real estate stakeholders in the city.Developers and real estate experts, however, pointed out that it will take at least two to three months to realise the full impact of the reduction of rates on the market. The new rates will come into effect from April 1.Furthermore, the decision by the council to change the definition of affordable housing by increasing the price point and plot area is also being seen as a big booster …

TEA president Raja M Shanmugham has written to the Union commerce ministry stating post GST roll-out, the association had sought the exemption.Tirupur Exporters’ Association has urged the Centre to extend the integrated goods and services tax (IGST) exemption period for import of capital goods under Export Promotion Capital Goods (EPCG) scheme beyond March 31, 2019, for another two years. They want the exemption for import of inputs under Advance Authorisation scheme, too.TEA president Raja M Shanmugham has written to the Union commerce ministry stating post GST roll-out, the association had sought the exemption. Considering the needs of the sector, the Centre had been extending the exemption term, phase-wise (for six months’ period each), since July 1, 2017. The current phase ends on March 31, 2019.The garments sector in Tirupur, comprising mostly MSMEs, is upgrading its operations to improve the quality of garments and increase productivity, in keeping with the growing demands of bu…

Capital expenditure contracts 13% in April-January periodNEW DELHI: With indirect tax collections remaining sluggish in the first 10 months of the current financial year, the Centre’s fiscal deficit at the end of January stood at Rs 7.7 trillion, or 21.5 per cent more than the revised target of Rs 6.34 trillion, showed the data released by the Controller General of Accounts (CGA) on Tuesday.To contain the deficit, the axe has fallen on capital expenditure, which contracted by 35 per cent in January alone. Capital expenditure has been contracting since September 2018.The government had earlier pegged the deficit at Rs 6.24 trillion for 2018-19 or 3.3 per cent of GDP. In the interim Budget for 2019-20, the deficit was revised upwards to Rs 6.34 trillion or 3.4 per cent of GDP.At the aggregate level, the Centre’s gross taxes revenues rose to Rs 15.62 trillion over the April 2018-January 2019 period, up 7.3 per cent from Rs 14.55 trillion over the same period last year.But while direct ta…

Credit rating agency ICRA said on Tuesday that lower GST rates for under-construction residential properties are expected to improve customer sentiment but removal of input tax credit may create short term disruption in sales and collections from ongoing projects in the near term.“The earlier GST rates of 8 per cent and 12 per cent were a dampener for customer buying sentiment during under-construction stage considering the high value of such transactions, leading to increased preference for completed properties,” said Mathew Kurian, Assistant Vice President at ICRA.“The revised rates are expected to revive customer interest in under-construction properties. However, in the near term, sales and collections in launched projects are likely to be disrupted by the change in tax computation method, as witnessed during the initial implementation of GST in July 2017.”As per ICRA’s estimates, assuming an 18 per cent input tax incidence and cost of construction of Rs 2,000 to 2,500 per square …

NEW DELHI: The Delhi government which presented its annual budget for 2019-20 on Tuesday, announced a target of collecting Rs 29,000 crore as Goods and Services Tax (GST).Presenting the budget in the Delhi Assembly, Deputy Chief Minister Manish Sisodia termed introduction of GST as a “significant step in the field of indirect tax reforms” through amalgamation of a large number of central and state taxes into a single tax.“Keeping in view the growth in Delhi’s economy, the target of GST collection in the budget estimates for the year 2019-20 is Rs 29,000 crore with estimated growth of 9.44 percent over the revised estimate of Rs 26,500 crore in 2018-19,” Sisodia said.The net GST revenue collected for the year 2018-19 (upto January 31, 2019) was Rs 20,766.77 crore and an amount of Rs 3,140 crore has been received as a GST compensation upto January, 2019, he said.A total 1,14,282 new GST registrations were done from April 1, 2018 till December, 2018, he said adding over two lakh new regi…

The Government of India has made changes in the GST provisions by making amendments in the Act itself vide Notification No. 02/2019 – Central Tax dated 29.01.2019 and made 01.02.2019 as the effective date for such changes. An attempt has been through this article to analyze the changes made by the CGST (Amendment) Act 2018 […]

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GSTR-2A vs Purchase Books reconciliation primarily involves matching the data uploaded by the suppliers in their GSTR-1, reflected in recipient’s GSTR-2A with those of the recipient’s purchase data.

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Generally, Onus to pay indirect-tax is on Supplier of Goods & Services. However, there are some cases where this liability to pay indirect-tax may be cast on the recipient of goods or services. This system is called as Reverse Charge Mechanism. Reverse Charge means the liability to pay tax is on the recipient of supply […]

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Impact of GST cut on Under construction property in 33rd GST Council Meeting on 24th Feb 2019 Finance Minister Arun Jaitley informed that GST on Under construction building to be reduced from 12% (after abatement towards land cost) to 5%, a reduction of 7%. The Council also reduced the rate of affordable housing from 8% […]

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As more properties fall under the affordable category, builders apprehensive about consequencesThe Centre has slashed Goods and Services Tax (GST) rates from 12 % to 5 % on under constructions homes and 8% to 1% on affordable houses, and flat prices are likely to come down, offering much-needed relief to buyers as well as to the real estate developers who have been struggling with lesser demand.However, the developers in Pune are divided on the latest decision with some saying that the government has not contributed to the homebuyer by reducing the tax collected.Read more“With affordable housing now being defined within ₹45 lakh budget, more properties qualify for this sweet spot category. The GST cut, coupled with the critical change in definition, will induce more sales in homes falling in this budget range which is a win-win for both builder and the buyer,” said Anuj Puri, chairman, Anarock Property Consultants.According to Rohit Gera, MD, Gera Developments, reduction of GST for un…

Power Grid Corperation of India is a private sector body but the government gives bank guarantee to it.
HYDERABAD: The Power Grid Corporation of India paid Rs 165 crore after sleuths of the Central GST anti-tax evasion wing detected it had not been paid.According to reports, the public sector body was supposed to pay service tax in the previous regime but after GST came into force, Rs 165 crore was supposed to be paid to Central GST.Power Grid Corperation of India is a private sector body but the government gives bank guarantee to it.For the guarantee, they are supposed to discharge commission to the government.A case was booked by the directorate, Central GST, Hyderabad zone, when it was found that the tax had not been paid.Source- Deccan Chronicle. The post Power Grid pays Rs 165 crore GST after evasion case appeared first on GST Station.

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The reduction in GST can potentially reduce the buyers payout by 6 per cent to 7 per cent on the overall purchase, depending on the category. The consequent accelerating sales will bring down the unsold inventory which has been afflicting the real estate sector.Knight Frank in its affordability index study said the potential reduction in payouts for purchase of a new home in key cities of India will further improve the affordability quotient across all markets. This is important as an improvement across all major cities with majority being under the 4.5 mark. This will help improve the affordability index further in key markets.Knight Frank India CEO Shishir Baijal said, ”The decision to reduce the GST on under-construction projects is the most decisive move with a clear focus on demand stimulation as it will improve affordability.”According to Knight Frank, the ideal affordability is identified at 4.5 times the average annual household income in a city. However, Mumbai (7), NCR (5) a…

NEW DELHI: Despite the fact that lots of people criticised Goods and Service Tax (GST) for the way it was implemented, Micro Small and Medium Enterprises (MSMEs) across the country termed it as the single biggest reform that has made the business environment better, according to a recent survey released by the India SME Forum.Nearly 62.13% of MSMEs surveyed, termed GST as the single biggest reform or that it made running business easier, though 9% of MSMEs said that more work is needed to implement GST, said survey report on state of MSME in India.Only 28% of MSMEs held introduction of GST responsible for MSMEs going out of business or for GST making business tougher for MSMEs.States where MSMEs have been highly positive about GST are Uttar Pradesh with 77.49%, Delhi with 77.25%, Haryana with 70.49%, Maharashtra with 69.40%, Madhya Pradesh with 69.13%, Andhra Pradesh with 69.08%, Kerala with 67.88%, Rajasthan with 66.92% and Tamil Nadu with 65.03%.On the other hand, states including G…

MUMBAI: Royal Dutch Shell Plc wants India to bring natural gas under the goods and services tax (GST) to make transport of the fuel across the country more efficient.“An element that would make transport (of natural gas) across the country more efficient is the inclusion of natural gas in the GST. We will be very supportive of that,” said Ajay Shah, vice president, Shell Energy Asia. Shah spoke to Mint after the release of Shell’s LNG outlook 2019 today.Shell owns the 5 million metric tonne Hazira liquefied natural gas (LNG) terminal in Gujarat and is also present in fuel retailing.“We see great prospects in India. We also want to be more involved in the Indian market. We think an open market is very very important. And a prerequisite to India’s natural gas hub is access to a level playing field,” added Shah.Shell predicts that India and China can double their LNG import infrastructure in five years and will be the prominent drivers of natural gas demand.“India is also using LNG to me…

By opting for a lower GST without giving builders the option of input tax credit, in effect, the taxman has accepted that tracking down the evasion in the sector is impossible.Depending on how much builders across the country cut GST rates on under-construction housing—from 12% to 5% in the case of normal housing and from 8% to 1% in the case of affordable housing—the market for real estate should get a big fillip; indeed, the reactions of most builders over the weekend, when the proposal was announced, suggested that large cuts would be made in the retail prices. It would, though, be prudent to look at the actual cuts over the next few weeks since it is possible that builders will argue that, as they are being denied input tax credit, the cut is revenue-neutral for them; indeed, since some tax officials have said the move is revenue-neutral for the government, the same logic should apply to builders as well. Indeed, a recent analysis done by the GST authorities of the country’s top b…

GST is applicable on under-construction properties and also on properties that are fully constructed but the completion certificate has not been issued.Buying a home involves several taxes and duties, which may go over 10 per cent of the total expenses, depending on the state and area which the property belongs to as the Stamp Duty varies from state to state. Not only buying, but owning a house also attracts property tax, which is payable every year.Out of the taxes that have to be paid at the time of purchase of a property, one is Goods and Services Tax (GST) which is applicable on under-construction properties and also on properties that are fully constructed but the completion certificate has not been issued.Apart from GST, other taxes and duties involved at the time of buying and owing a house are Stamp Duty and Registration Charges, apart from Property Tax which is payable every year till you are in possession of the house.Goods and Services Tax (GST)Before buying a new hose, che…

Volumes could see an uptick, given the benefits for consumers and lack of pricing power for developersAfter cheering the Goods & Services Tax (GST) Council’s move on the GST for under-construction property in early trade, realty stocks ended the day in the red, with the BSE Realty Index shedding nearly a per cent. On Sunday, the Council reduced tax by 700 basis points each on under-construction property for affordable housing projects as well as for other projects.The government has hoped the same would bring some relief to the beleaguered sector grappling with issues of high inventory, poor demand, delayed projects, and high debt. Source- Business Standard. The post Developers have little to cheer from GST cut on under-construction houses appeared first on GST Station.

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In re M/s Prabhat Gudakhu factory (GST AAR ODISHA) In the scheme of classification of tobacco product for the purpose of assigning HSN Code under tariff sub-heading 2403 11, only water pipe tobacco intended for smoking in a water pipe are included and not any other form of tobacco. As explained above, the applicant is […]

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A ruling on whether the decision of the GST Council granting the exemption is binding on the Department in the absence of non-issuance of corresponding Notification by the Central/State Government is not within the competence and mandate of the Authority of Advance Ruling constituted u/s 96 of the OGST Act.

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The GST Council in its 33rd meeting has in principle given approval to the below proposals in respect of residential sector of the real estate sector from 1st April, 2019. Details of the scheme shall be worked out by an officers committee and shall be approved by the GST council in a meeting to be called specifically […]

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GST exemption has been proposed on Transfer Development Rights  (TDR) / Joint Development Agreement (JDA), long term lease (premium), Floor Space Index (FSI) GST Council has specified that an Intermediate tax on these development rights such as TDR, JDA, lease (premium), FSI will be exempt from GST for such residential properties on which GST is […]

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The GST Council, in its 33rd meeting held on 24th Feb 2019, addressed the reports of slowdown in the real estate sector and low off-take of under-construction houses. Real estate sector, being one of the largest contributors to the national GDP and with the Government’s vision on “Housing for All by 2022”, following recommendations were […]

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The crucial aim of building the GST system is to allow a free and transparent flow of credit for taxpayers. The new system looks up to accomplish this.As we prepare to enter the next phase of GST compliance, e-way bills are set to take centre stage. With the two systems, GST return filings and e-way bills, likely to see integration and confluence, the challenges are important to make sure that businesses comply with them. GSTN along with GST Council is steadily paving the way for a smooth transition into the GST 2.0 – the newly proposed GST Return filing system to be introduced on the GST portal. While the full-fledged implementation is starting from 1st July 2019, the pilot run is set to begin in April 2019. While the e-way bill site has seen significant developments in terms of the user interface since its inception, the GST authority has noticed that it is a right time to start integrating the same with GST portal. One of its plan of actions is to disallow taxpayers from using the …